Marvell Technology Inc (MRVL)

[SyndicateTwo]

If you are on my email list, I mentioned two weeks ago that BRCM was breaking out of its downtrend. I subsequently moved all my MRVL into BRCM because BRCM seemingly gets the 'big' money when that money moves into this sector. I think MRVL has become a 'show me' stock in that the big money doesn't have any appetite for risk in this market now and MRVL is a second tier behind BRCM which has a clearly stronger balance sheet and tons of cash. MRVL is on the fringes on that front and if it weren't for its revenue stream would be in big $$$ trouble.

So, if you like MRVL, you must just move your money into BRCM. MRVL however will move much better than BRCM if the entire sector catches a big bid - which I think is possible this year toward the end of the year. MRVL could move easily 70%+ back up to the high teens while BRCM is probably capped in the $20s for a long while. But at least the downside is mitigated hugely in both. The selloff you saw in these has more to do with capital preservation by hedgies than anything else. Even the quant funds dropped bids.

The market will again bid up semi's first this time and you might very well be seeing the first signs of this as both the $SOX and BRCM have broken their long term downtrends.

What BRCM is now doing I think is refreshing the break out and could test the downtrend - which is very healthy. So, look to buy around $17ish to $18 again POSSIBLY. That wouldn't at all be a problem. Just a retest.